Dive Brief:
- Home for buildings with five or more units down 21.8% year-on-year at a seasonally adjusted rate of 363,000 in July, according to a monthly report from HUD and the US Census Bureau. However, they increased by 11.7% compared to June 2024.
- Developers withdrew permits for a seasonally adjusted rate of 408,000 apartments in buildings of five units or more, an 18.2% year-over-year drop and a 12.4% decrease from June 2024.
- Overall, housing starts came at a seasonally adjusted annual rate of 1.2 million in July — down 16% year-over-year and down 6.8% from June 2024. Single-family home builders started to build 851,000 homes, a year-on-year increase of 14.8% and 14.1% below June numbers.
Diving knowledge:
As starts have fallen sharply in 2024, apartment developers are continuing to work on their existing projects, shrinking the remaining pipeline. At the end of July, 870,000 units were under construction, down 13.3% year-over-year and down 1.5% month-over-month.
Multifamily developers completed about 473,000 annualized apartments in buildings of five or more units in June, a 49.2% year-over-year jump and a 24.4% decline from June.
While many private developers still face trouble finding capital, REITs appear to be eyeing more startups.
In the second quarter, based in Arlington, Virginia AvalonBay Communities completed three projects a total of 901 apartments. He broke ground on three other developments comprising 903 apartments and 6,000 square feet of commercial space.
“We now expect to break ground on nine new communities this year with an expected total capital cost of $1.05 billion, with the vast majority of these starts in the expansion regions or the Northeast and almost exclusively in suburban submarkets,” he said. said Matthew Birenbaum, head of AVB. investment officer, on the REIT’s second-quarter earnings call last month.
In Q2, based in Houston Camden Property Trust has completed construction in the 189-unit Camden Woodmill Creek single-family rental community in The Woodlands, Texas. It also broke ground on two new projects in Charlotte, North Carolina: the 420-unit Camden South Charlotte and the 349-unit Camden Blakeney.
Camden doesn’t expect more development to begin in 2024. However, the company has other projects lined up for 2025 and beyond.
“I also think we’ll be able to expand the pipeline by helping other developers who can’t get financing, who have shovel-ready land deals that they’re willing to part with,” CEO Ric Campo said in the REIT’s second quarter. earnings call this month. “If you look at our history in cycles like this, we’ve always been able to grow our development portfolio.”
Click here to sign up to receive multifamily and apartment news like this article in your inbox every weekday.
